ACMA study: 36 percent of aftermarket components are fake

According to the findings of a recent study conducted by the Automotive Component Manufacturers Association of India (ACMA), along with market research agency Nielsen Company, it is estimated that almost 36 percent of the components in the aftermarket are fake or spurious products.

The study titled ‘Emerging trends in distribution, servicing and future regulations’ in the Indian auto component aftermarket estimates the current size of the components business at Rs 24,800 crore. The two-wheeler segment leads the market with 49.7 percent, followed by passenger vehicles, commercial vehicles and three-wheelers at 24.7 percent, 23.1 percent and 2.5 percent respectively. The study reveals that the aggregate aftermarket worldwide is expected to cross $ 1 trillion by 2012, growing at over five percent. “Only 41 percent of the components consumed in the Indian aftermarket belong to OEMs and OESs with other manufacturers and imported parts contributing to a 23 percent share,” says Soumitra Bhattacharya, chairman of ACMA’s committee on consumer affairs and aftermarket.

The top 100 towns and cities in the country by population account for 56.2 percent of the total two-wheeler parc, 45 percent of the total three-wheeler parc, 66 percent of the total passenger vehicle parc and 54 percent of the total commercial vehicle parc.

A growing vehicle penetration in these cities and an evolving aftermarket is expected to grow the market share of the OEM-authorised network of service stations to around 20 to 30 percent by 2017 from the existing 15 to 25 percent. The market share of multi-brand organised service chains will grow to 5-10 percent from the current 1-2 percent, the study estimates.

Semi-organised service centres are expected to account for a share of 20-30 percent by 2017 from the existing 10-20 percent today. The share of unorganised garages will in turn drop from the current 60-70 percent to 45-55 percent.

“Only a small portion of vehicles in India are serviced by OEM-authorised service centres, the rest by organised, semi-organised and a large number of small unorganised players,” says Arvind Kapur, president, ACMA. He underlines the need for modern logistics management in the aftermarket value chain for which distributors, retailers, stocking garages will need training and education on scientific inventory management, deployment of IT systems and professional management.

ACMA has been spearheading various special initiatives to help increase public awareness on the menace of counterfeit parts and the danger to life and property due to usage of spurious auto components. Its ‘Asli–Naqli’ campaign launched in 2003 has helped create substantial awareness and a number of leading component manufacturers like Bosch, Federal Mogul and Delphi have joined ACMA is conducting joint raids on counterfeiters.